U.S. Sees Fewer Foreclosures as Banks Reclaim More Homes

By Elvina Nawaguna

WASHINGTON -- Foreclosure activity across the United States fell 1 percent last month, as banks scheduled fewer auctions even as they reclaimed more homes, a report from RealtyTrac said Thursday.

The latest drop brought foreclosure activity, which includes foreclosure notices, scheduled auctions and bank repossessions, 20 percent below its year-ago level. It was the 43rd consecutive month foreclosure activity was down on an annual basis.

According to RealtyTrac, which tracks and compiles housing market data, 115,830 homes were at some stage of the foreclosure process last month. On the eve of the economic downturn in 2006, foreclosure activity was running at about 85,000 properties a month. U.S. foreclosures peaked at 2.9 million properties with filings in 2010.

"What this means is that we are getting closer to pre-recession levels of foreclosure activity," RealtyTrac vice president Daren Blomquist told Reuters.

Bank repossessions, though still down 14 percent from a year ago, were up 4 percent in April, partly due to state and government interventions that slowed down the foreclosure process. Overall, 30,056 homes were repossessed.

%VIRTUAL-article-sponsoredlinks%"The rise in bank repossession in many states is a sign that those markets are working through the final remnants of foreclosures left over from the recent housing crisis," Blomquist said.

Florida, with one in every 400 homes facing foreclosure, continued to have the highest rate in the nation, followed by Maryland, Delaware and Indiana.

A total of 49,239 homes were scheduled for a foreclosure auction last month, down 3 percent from March and 21 percent from a year ago. It was the 41st straight month in which scheduled auctions were down on a year-on-year basis.

Many of the bank-owned homes are of low quality and in bottom markets, but will provide much-needed inventory for sale in the coming months, Blomquist said

The housing market has taken a hit from a run-up in interest rates over the past year and an unusually cold winter, but a report last month on contract signings for March suggested the industry is getting back on its feet.

"We know the ending to the story; we know that we expect, by this time next year, foreclosure activity to be back to pre-recession levels," Blomquist said. "There are going to be some bumps on that path to normal, but we don't see any headwinds that would cause foreclosures to rise."